Commodities were in focus as silver futures tumbled nearly 10 percentat one point amid heavy volume. Silver futures for May delivery ended 7.6 percent lower at $42.58. The CME is raising margin requirements for silver after the market closes Tuesday. Gold also sank, falling more than 1 percent to close at $1,540.

The Dow Jones UBS Commodities Indexfell more than 1 percent.

Oil prices also sank. London Brent crude fell 2.13 percent to close at $122.45, while U.S. light crude fell 2.18 percent to $111.05.

In corporate news, shares of Alcoa surged amid talk that Rio Tinto was planning to buy the aluminum producer. Neither company would comment on the rumors, but activity in the options market also heated up as traders speculated on the deal.

GM gained after reporting a 27 percent jump in April sales,much more than expected, thanks to strong sales of small cars, including the Chevrolet Cruze, and crossover vehicles. Ford traded flat after reporting a 16.4 percent gain in April sales, its highest number since December.

And Nissan fell slightly after the Japanese automaker said its sales rose 12.7 percent in April from a year earlier. Rival Toyota fell after reporting its sales fell 2.4 percent in April from a year ago, which was less than expected.

Overall, automakers are expected to show a 16 percent increase in sales for April, according to a Thomson Reuters survey, as problems caused by the multiple disasters in Japanweren't expected to show up in new auto purchases until May.

Among tech stocks, semiconductor makers Nvidia and Micron Technologies contributed to the Nasaq's decline, with shares of both down 4 percent.

Sony shares also slipped after the PlayStation maker revealed that hackers may have stolen the data of another 25 million accounts in a second massive security breach.

Earnings results continued to be released on Tuesday and of the 359 companies reporting so far, representing 72 percent of all S&P 500 companies, 70 percent beat earnings estimates and 69 percent beat revenue estimates, according to Thomson Reuters.

Pfizer slipped after falling short of revenue expectations, although the pharmaceutical company's results were a penny ahead of estimates.

Mastercard gained after the credit card processing company reported a jump in profits. In addition, at least two brokerages raised their price targets on the firm.

Beazer Homes tumbled more than 5 percent after the homebuilder reported a larger-than-expected loss because orders for new homes fell, reflecting continued weakness in the housing industry.

And Clorox and Molson Coors Brewing each fell after both firms reported lower net income compared to the same period last year. The consumer goods maker and beverage company both blamed higher costs for raw materials for the decline.

Sirius XM Radio jumped almost 10 percent after the satellite radio provider's revenue was boosted by more subscribers, but it said lower car sales in the wake of the earthquake in Japan could hurt its subscriber growth this year.

Legg Mason tumbled despite reporting an 8 percent profit gain.

And Sears slid after the clothing retailer forecasted a loss. Meanwhile, S&P Equity cut its price target on the firm to $71 from $90.

Comcast , CBS and Green Mountain Coffee were expected to release results after the market closes.

In M&A news, Total, a European energy firm, launched a friendly offer for solar-power company SunPower .

In the day's economic news, factory orders gained 3 percent to a seasonally adjusted $463 billion in March, the Commerce Department reported. The gain was the fifth in a row, and was above the 1.9 percent gain estimated by economists polled by Reuters.

And a survey by Charles Schwab indicated 72 percent of so-called active traders who are receiving a tax refund plan plan to invest the proceeds in the stock market. Schwab defines active traders as individual investors who trade at least 36 times a year.

Schwab also said 47 percent of its active traders are bullish, up from 38 percent in November, and up from 28 percent in April 2010.

Stocks in Asiaended the day mostly lower with Japanese markets closed. European shares closed down as mining and oil stocks fell.